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Groupon pushes deeper into travel with Uptake acquisition

Groupon may be a multi-billion dollar company, but the daily deal market has lost quite a bit of its luster over the past year. From consumer fatigue to merchant nightmares, the daily deal isn’t going away but will likely have to evolve sooner than later.

One of the ways Groupon is addressing this is by tapping into different markets. For instance, it’s experimenting with outdoor kiosks that target deals to tourists in popular U.S. cities.

The company’s tourist-focused kiosk strategy hinted that travel-related deals may become a bigger part of the company’s business going forward and that seems to be confirmed with Groupon’s acquisition of travel search startup Uptake.

According to AllThingsDigital’s Liz Gannes, Groupon paid in the “teens” of millions for the company, which had raised some $14m in venture capital. As Gannes explains, “Uptake used personalized social data to help users research destinations through their friend networks. When I talked to the company last year, CEO Yen Lee boasted of his company’s skills in analyzing unstructured data about travel, rather than relying on explicit signals like Foursquare check-ins.”

That skill appears to be what Groupon is interested in. While it’s not clear what Groupon will do with Uptake (this may be an acquihire), the ability to analyze travel data could be a boon to Groupon if it moves more aggressively into travel. After all, understanding this data could enable Groupon to better target tourists with deals, and to woo merchants looking to sell to those tourists.

How good a thing that proves to be for Groupon remains to be seen, however. As I noted previously, “if Groupon is specifically targeting tourists, it hints that Groupon is less focused on introducing new customers to merchants, eventually driving repeat business in the process.” That ability to drive repeat business, of course, has been a core value proposition to merchants. If Groupon can successfully get away from that, it may be able to address at least some of the concerns that have emerged about the daily deal model in recent times.